Asia Markets

Asia markets mixed as Japan's autos slip; dollar weakens

Key Points
  • Japan reported its exports in October did much better than expected, falling 0.2% as compared to a 4.5% decline forecast in a Reuters poll.
  • Autos, one of the country's key exports, fell, however.
  • U.S. stocks fell overnight as the market's recent rally cooled off, with coronavirus cases continuing to surge in the country.
  • The U.S. dollar index fell sharply in the afternoon.

SINGAPORE — Asia-Pacific markets were mixed by the close on Wednesday. Investors remained cautious despite vaccine hopes, as coronavirus cases continued to surge.

Meanwhile, the U.S. dollar continued its slide.

China's Shanghai composite edged up 0.22% to close at 3,347.30, while the Shenzhen component fell 0.54% to 13,658.20.

Hong Kong's Hang Seng index traded 0.25% higher in the afternoon.

In Japan, the Nikkei 225 fell 1.10% to close at 25,728.14, while the Topix dropped 0.81% to 1,720.65. Japanese exports in October did much better than expected, falling 0.2%, according to the Ministry of Finance. That's compared to a 4.5% decline forecast by economists in a Reuters poll. It followed a 4.9% drop in September.

Exports were helped by a rise in demand for Japanese cars by China and the U.S., which drove up shipments, according to Reuters.

However, automakers — among the country's key exports — fell across the board. Mitsubishi Motor dropped almost 5%, while Honda declined 3.78%. Toyota slipped 1.61%.

SoftBank shares slipped 0.91%. Its CEO Masayoshi Son said he aggressively sold assets this year to prepare for a "worst case scenario" in which the world shuts down during a second wave of coronavirus outbreaks.

In South Korea, the Kospi edged up 0.26% to close at 2,545.64. Australia's S&P/ASX 200 rose 0.51% to 6,531.10.

Overall, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.42%.

In company news, Taiwan's Foxconn opened a $26 million factory in northern Vietnam to produce displays, Reuters said, citing the Vietnamese government. Foxconn shares bounced nearly 1% for the day.

Caution returns on coronavirus risk

U.S. stocks fell overnight as the market's recent rally cooled off. The Dow Jones Industrial Average dropped 167.09 points, or 0.6%, to close at 29,783.35. The S&P 500 dipped 0.5% to 3,609.53, while the Nasdaq Composite fell 0.2% to 11,899.34.

"Markets were subdued overnight as COVID case numbers damped down the longer-term positivity that a vaccine could deliver. Data overnight showed consumer confidence is waning and retail spending easing," wrote Rahul Khare, an analyst at ANZ Research.

Earlier this week, Wall Street had climbed to record highs after Moderna announced data from its coronavirus vaccine trial — which came days after Pfizer's upbeat news on its own vaccine candidate.

Still, coronavirus cases continued to surge in the country, dampening optimism. The U.S. seven-day average of daily new Covid infections surpassed 150,000 for the first time on Monday, according to a CNBC analysis of Johns Hopkins data.

On Tuesday, U.S. Fed Chair Jerome Powell warned that the surge in cases is a concern for an economic recovery that has "a long way to go."

Disappointing U.S. retail sales also weighed on sentiment, with data showing it increased less than expected in October.

Dollar continues sliding

The U.S. dollar index, which tracks the greenback against a basket of its peers, fell sharply in the afternoon of Asia trading hours. It was last at 92.278, following levels above 92.4 earlier in the day. Earlier in the week, it was at levels above 92.6.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note that "demand for dollars should be limited by the fear of further restrictions on business activity."

The Japanese yen strengthened further in the afternoon, last trading at 103.85 per dollar, as compared to levels above 104.5 earlier. The Australian dollar was at $0.7308 against the dollar, firming from earlier levels.

Oil prices gained in the afternoon of Asia hours after some declines earlier. U.S. crude futures edged up 0.14% to $41.49 per barrel. International benchmark Brent crude futures traded 0.46% higher to $43.95 per barrel.

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